Can overtime, commission and bonuses be claimed for when staff are furloughed?

The Coronavirus Job Retention Scheme is available to UK employers who have ‘furloughed’ one or more of their employees, this means that these staff are still on your payroll but are not carrying out any work for you whatsoever. As employment law matters need to be considered before ‘furloughing’ an employee, therefore appropriate steps need to be followed. 

For each furloughed worker, an employer can claim 80% of their usual wages, up to a maximum of £2,500 per month. Also, the employer can claim the Employers National Insurance and mandatory Employer pension contributions (where applicable) on this amount.

When considering the amount to claim, HMRC states that you should include the regular wages that you pay to your furloughed employees, including compulsory overtime, bonuses, and commission. However, the following must be excluded:

• Payments made at the discretion of the employer. i.e. there is no contractual obligation to pay the amounts. This includes discretionary bonuses and commission, plus tips.
• Benefits in kind
• Any non-cash payments

In some cases the calculations can become more complicated, and HMRC has produced detailed guidance and examples here.

You should consider seeking professional advice if you are unsure of how to calculate the amount to claim, and if appointed as an agent for PAYE purposes then an accountant can submit a claim on your behalf.

Date published 23 Apr 2020 | Last updated 5 May 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.